FAQs

A. The most appropriate format will depend on a number of different factors including taxation.

A. IHT is currently payable where a person’s wealth is in excess of £325,000 (the nil-rate band). An additional residence nil-rate band now applies when a main residence is passed on death to one or more descendants (including a child, stepchild, adopted child or foster child) of the deceased and their descendants.

• anything you leave to your spouse
• anything you leave to a UK registered charity
• any bills outstanding at your death (including your funeral expenses)

Anything that you give during your lifetime or leave on your death to your spouse is completely free of inheritance tax, but both of you must be domiciled in the UK.

• land and buildings
• units in a unit trust
• shares in a company
• higher value jewellery, paintings, antiques & other personal effects
• assets used in a business, such as goodwill

• your private car
• cash held in sterling
• any foreign currency held for your own or your family's personal use
• jewellery, paintings, antiques and other personal effects that are individually worth £6,000 or less
• Savings Certificates, Premium Bonds & British Savings Bonds
• UK Government stocks (“Gilts”)
• assets held in an Individual Savings Account (ISA) or Personal Equity Plan (PEP)
• betting, lottery or pools winnings
• personal injury compensation

Capital Gains Tax is chargeable whether the assets are in the UK or abroad.

If you sell an asset

Typically, you have made a gain if you sell an asset for more than you paid for it. It is the gain that is taxed, not the amount you receive.

If you give an asset away

If you give an asset away, you normally look at what it is worth, not what you get for it. The same is true when you sell it for less than its full worth in order to give away part of the value.

If you dispose of an asset you had been given

You might dispose of an asset that you had received as a gift. When you work out the gain you normally use the market value of the asset when you received it.

If you have inherited an asset

If you inherit an asset, the estate of the person who died does not pay CGT at that time. If you later dispose of the asset, you work out the gain by looking at the market value at the time of the death.

Some other cases where you might have to pay CGT

You may also have to pay CGT if you dispose of part of an asset or exchange one asset for another. In addition, CGT may be payable if you receive a capital sum of money from an asset without disposing of it, for example, if you receive compensation when an asset is damaged.